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The newest issue of  The Nation  herald’s the 2001 Nobel Laureate Joseph Stiglitz as a “rebel with a cause.” That characterization is certainly a stretch for an economist, who is former senior vice president of the World Bank and who adheres to orthodox Keynesian doctrine, the dominant economic paradigm of mainstream political and economic theory

According to “supply-side” economics, the key to economic growth and prosperity is low marginal tax rates. However, the supply-side school also maintains that a low marginal tax rate will not be sufficient, that it must be accompanied by a monetary policy that aims at achieving price stability. The pillar of the proposed monetary policy is a

With the recent meltdown in stock prices, some economists have said that there is no need to be concerned because the stock market does not reflect what is happening to the economy. (Curiously enough, when the stock market was going up, it was held by most experts to be the leading indicator of a strong economy.) However, the stock market doesn’t

For the time being, the Fed’s decision makers have decided to keep the federal funds rate target unchanged at 1.75 percent. They hinted, however, that if the economy were to slow further, they would lower the rate.  Some commentators have protested that the Fed should not lower rates because doing so will dilute the strength of this tool in

Some influential Wall Street economists are alarmed that cost cutting by many companies in order to secure profits is a major threat to the economy. They say that if everyone tries to cut costs and save more, demand for goods and services from fired workers will fall, which in turn will hurt corporate revenues and, thus, profits. This, in turn,

In the latest move to revive Japan’s financial system, the governor of the Bank of Japan (BOJ) announced that the central bank would buy stocks directly from lending institutions in order to help them reduce the impact of falling share prices. According to the plan, the BOJ will hold the purchased stocks for at least 10 years. The persistent fall

This year the Nobel prize in economics was awarded to Daniel Kahneman and Vernon Smith. These two economists have been probing the validity of popular economic theories regarding peoples’ choices. Kahneman integrated insights from his psychological research into the field of human judgment and decision making under conditions of uncertainty. Smith

Frank Shostak is an economist at Man Financial, Australia. He was interviewed following the announcement of the Fed’s latest policy move. Mises.org:  The Fed has lowered the interest rate, again, and it seems that the whole world is celebrating. Frank Shostak : Actually, it is a disastrous move, so far as I’m concerned. Last year, the Fed cut

Most economists are of the view that the current monetary system amplifies the initial monetary injections of the central bank. Thus, according to a popular view, if the Fed injects $1 billion into the economy and banks have to hold only 10% in reserves against their deposits, this will cause a first bank to lend 90% of this $1 billion. The $900

Since the introduction in 1912 of Ludwig von Mises’s Austrian Business Cycle Theory (ABCT) in his book, The Theory of Money and Credit , it has been subject to relentless criticism.  According to the ABCT the artificial lowering of interest rates by the central bank leads to a misallocation of resources on account of the fact that businesses